Which of the Following Situations Is Not an Example of Market

question 26

Multiple Choice

Which of the following situations is not an example of market failure?

• A) Ben's Department Store cannot charge passers-by for using the sidewalk outside the store.
• B) Ben cannot afford to buy a high-end Mercedes Benz luxury car.
• C) Ben's Place is the only restaurant in town, and thus he has significant power to set menu prices.
• D) Ben's Industries is dumping its wastewater into the unregulated river behind the factory.

---

Definitions:

Operating Activities

Activities that constitute the primary or main activities of an organization, including production, sales, and delivery of services.

Cash Dividend

A cash distribution given to shareholders from the company's earnings.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time.

Net Sales

The revenue from goods or services sold after deducting returns, allowances for damaged or missing goods, and any discounts allowed.